Interview on Channel 9 Today with Karl Stefanovic

Karl Stefanovic: Well, the Government’s new child care funding system starts today but many Aussie families are still trying to figure out whether they’ll be better or worse off. The Education Minister Simon Birmingham joins us now.

Simon, good morning to you. What do parents need to do today to ensure they’ve switched over to the new system?

Simon Birmingham: Well, good morning Karl. The great news is that more than 1 million Australian families have already switched over to the new system. So for those families, turn up as usual, drop your kids off in the care of the wonderful educators, and in the vast majority of instances know that you will be better off on average, we estimate, to the tune of around $1300 per child per annum which of course is a huge saving in many household budgets and certainly against the cost of child care bills.

Karl Stefanovic: So who will be better off then?

Simon Birmingham: So those better off are the around 100,000 Australian families who are already hitting up against the old $7500 cap on the Child Care Rebate, which we’ve abolished as a government for anybody as a family earning less than around $187,000 a year. Equally, lower and middle-income families will see the rate of subsidy increase for the lowest income families from 72 per cent up to 85 per cent. That’s why we see such significant financial benefits flowing through, all of it designed to help make it easier for families to work that extra shift, work that extra day without child care costs being an impediment.

Karl Stefanovic: And who’s going to be worse off?

Simon Birmingham: The only categories where people might be disadvantaged are very high-income earners. So this new child care subsidy does phase out, and anybody earning more than $350,000 per annum as a family will see that they no longer receive support. But that’s so we can direct more into those low and middle-income earning families, and there’s a new activity test so that we can target the greatest number of hours of subsidised child care support to the families working the longest hours. But again, you need only work, study, train, volunteer, look for work, care an average of four hours per week.

Karl Stefanovic: Okay. We’ve had hundreds of parents write into us at the Today Show saying their day care fees are going up anyway. So will the benefits of your new system just be wiped out?

Simon Birmingham: They shouldn’t be. We budgeted that there would be some of the usual new financial year fee increases as part of this reform, so the fact there are fee increases doesn’t mean that the benefits are wiped out. In fact, the whole system is structured to cater for the fact that each year, there should be some modest fee increase and the subsidy rate will increase in accordance with that, according to a new benchmark price we put in. We went out and did thorough consultation on this. We had the Productivity Commission look at how do you deal with rising fee prices. We’ve put, for the first time ever, a benchmark price in place that according to the Productivity Commission should keep a lid on the extent of future fee increases.

Karl Stefanovic: Let’s hope so. A good poll out for you guys today, in the Coalition. Not so good for Bill Shorten. When do you think Anthony Albanese will have a tilt?

Simon Birmingham: Well, that’s up to Albo, but I’m sure that Albo is plotting and scheming and this poll will only egg him on. But of course, this is just the case of Australian people realising that Bill Shorten is there to dig into their pockets, take more tax out of their pockets, take more tax out of the pockets of Australian small and medium family businesses. Unfortunately, the Labor policies are all just about more taxing, more spending, and that wouldn’t change whether it was Albo or Bill to be frank.

Karl Stefanovic: Good on you, Simon. Thanks for your time this morning. Appreciate it.